Generation D For Digital -- Or Is It Distrust?

NEW YORK (MainStreet)Michael Cavacini is an aggressive investor who studies personal finance books for information and regards commission-based financial advisors as salespeople. At 28, the Philadelphia communications professional is a member of the Millennial Generation, but his attitudes also place him among a recently invented group called Generation D.

The "D" stands for "digital," according to Accenture, the consulting firm that created the classification while studying changing investor attitudes. It could also stand for "distrust," however. Along with being savvy users of social media and other 21st-Century communication platforms, this group -- which actually spans several generations -- displays marked misgivings about the financial community, especially banks and financial advisors.

A perception that the last recession was to some extent caused by financial services industry missteps underlies the suspicion of financial advisors that Accenture's studies revealed, says Alex Pigliucci, global managing director of Accenture's wealth and asset management services unit. "They weren't sure if they were really salespeople or trusted advisors looking out for their best interest," Pigliucci said.

In the absence of warm and fuzzy feelings toward financial advisors, Gen D investors tended to look online for information about investing and to comparison shop vehicles and providers. Yet when they went to financial institution sites, Pigliucci said, they found technology a step or two behind what they could get from other vendors like retailers.

Wall Street wants to know about attitudes among Gen D investors because the 75 million members of Gen D hold $27 trillion in assets. And it's a cross-generational group that isn't covered by existing demographic studies. About half are 31- to 45-year-old Gen Xers. The rest are split almost equally between 21- to 30-year-old Millennials and 46- to 70-year-old Baby Boomers.

Accenture characterizes Gen D overall as generally active investors with more income, education and assets than most, and a strong digital involvement. Within the group, Millennials are the most skeptical, Gen Xers the least confident and Boomers the most trusting. Millennials are also significantly more likely to be conservative investors than are Boomers.

Millennial member Skye McIntyre describes her investing style as conservative, mostly because she doesn't feel confident about her investment knowledge. The 27-year-old Boston public relations account supervisor says she stays up on financial news about topics like unemployment and interest rates. When it comes to advice on investing, however, she is likely to rely on her parents or employer.

McIntyre could see herself going to a financial professional for advice, but only if she felt she was viewed as more than an opportunity to generate a commission on a sale. "If I felt pressured when seeking their advice, I'd look elsewhere for answers to my questions and suggestions as to where and with whom to invest," she says.

The findings came from surveys of more than 1,000 people, followed by smaller focus groups. Generally speaking, the investors' attitudes stem from two of the most important developments of the last several years, namely the Great Recession and the rise of digital social and mobile media.

Among the consequences of the shift are a major mismatch between the typical Gen D investor and the typical financial advisor, who tends to be older and less digitally savvy. To cope, financial firms are hiring younger advisors and trying to develop their social and mobile brands.

None too soon, a lot of work is going into digital platforms and recruiting, Pigliucci says. "This industry is changing and is going to change rapidly," he says. "And it's behind the curve compared to other industries."

Behind the curve doesn't sit too well with Gen D investors like Cavacini. He's confident he can readily acquire the critical skills to invest wisely on his own, and plans to do so through reading and consultation with knowledgeable family and friends. Should he desire professional advice, he intends to seek it from fee-only planners as opposed to commissioned brokers.

Cavacini is determined not to be financially strapped when the time comes to retire. He expects to accomplish that while still devoting a good portion of his income and assets to philanthropy. And he's aiming high when it comes to where he wants to wind up.

"I want to be a multi-millionaire," he says. "Not so I can tell people about it but so I can live comfortably and never have to worry about basic necessities."